driving productivity in major asset and system maintenance ... · driving productivity in major...

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December, 2009

Driving Productivity in Major Asset and System Maintenance, and Billing

Executive Summary

1

Contents

▪ Executive Summary

▪ Drinking Water Asset Maintenance

▪ Waste Water Asset Maintenance

▪ Utility Maintenance Branch

▪ Utility Customer Services

2

Executive summary

▪ The productivity project included four workstreams: Drinking Water Maintenance, Waste Water Maintenance, Utility Maintenance Branch and Utility Customer Service

▪ Each workstream has followed three core principles in order to propose a number of initiatives to reduce costs and improve service:

– Get it right 1st time

– Use resources efficiently

– Treat customers fairly

▪ Initiatives worth almost $10m per year have been proposed which will contribute over $7m already in FY11. Each workstream identified savings of 8-23% of baseline spend in scope, with overall savings equal to 18% of spend

▪ All major initiatives have been piloted already and now need to be rolled out across the utility system. Additionally, plans were made to extend key initiatives to structurally similar areaswithin the next 6-12 months

▪ To ensure sustainable impact, detailed implementation plans were developed for each initiative and success will be tracked using a set of specific operational KPIs

▪ Your support is necessary especially in Utility Customer Services as here several key initiatives need political approval

▪ In the context of the project several additional areas with significant financial improvement potential were identified. The highest priority areas appear to be capital projects, contractor performance management and areas in UMB not yet optimized

3

The improvements proposed as part of the productivity project follow three core principles

Get it right 1st time

Use resources efficiently

Treat customers fairly

Description

▪ Have the right information to be able to complete work correctly the first time, reducing multiple visits

▪ Eliminate root causes of repetitive technical failures

▪ Use all resources, including people, efficiently through better planning and scheduling, appropriately sized teams, reduction of non-value-adding activities and establishing standard operating procedures

▪ Improve quality of customer facing processes▪ Charge appropriate fees to cover the direct costs of work

done for specific customers to ensure customers are not cross-subsidizing each other

4

Each workstream has identified initiatives across these principles

Get it right 1st time

Use resources efficiently

Treat customers fairly

Drinking Water Operations/ Waste Water Operations Utility Maintenance Branch Utility Customer Service

▪ Complete more preventative maintenance to reduce repetitive failures

▪ Write detailed investigation reports so crews know what parts are required to complete the job

▪ Prioritize fixing endpoints over taking manual reads repeatedly

▪ Improve planning and scheduling of maintenance technicians to reduce driving and waiting time

▪ Use less white rock and replace with cheaper crushed concrete

▪ Assign jobs to 2-men crews where possible

▪ Screen out unnecessary field jobs before they go to the field teams

▪ Prioritize work based on availability of assets

▪ Prioritize repair jobs based on objective criteria, communicate targeted completion time to customer and meet promised response times

▪ Increase connect and reconnect fees to cover direct costs and eliminate cross-subsidization

SELECTED EXAMPLES ONLY

5

In total these initiatives are worth almost $10m/yr, with over $7m effective in FY11

2,460

2,860

607

738

Ongoing

9,921

3,336

2,987

FY11

7,300

1,896

2,635

309

FY10

981

150 20222

Utility Customer Service

Utility Maintenance Branch

Waste Water Operations

Drinking Water Operations$ 000s

6

Each workstream identified savings of 8-23% of baseline spend in scope, with overall savings equal to 18% of spend

16.4

Agreedimprovements

3.3**

In scopeNot reviewed

15.0

Baseline spend

31.4

-20%

12.93.0

42.155.0

-23%

16.82.9

15.932.7

-17%

0.79.8

0*9.8

-8%Drinking Water Maintenance

Waste Water Maintenance

Utility Maintenance Branch

Utility Customer Service

$m annualized impact

Overall improvements

agreed are equal to 18% of baseline spend in

scope

* Not full scope reviewed – quantification of reviewed share still pending ** Includes revenue increases

7

Your support is necessary to implement key improvements in Utility Customer Service

Required supportImpact*, $000s/yrRationale for measure

* Annualized savings, FY11 potential depends on implementation date

Fix meter issues in billing cycles

▪ Still significant technical problems with older generation AMR meters

▪ Currently, focus is to get manual meter read rather than fix underlying problems

▪ Plan has been developed to massively increase number of first-time fixes

▪ Support read-estimate pattern for meters with technical problems to free up resources for first-time fixes

Increaseservice fees to match cost

▪ Multiple service fees (e.g., connect, reconnect) do not cover the costs incurred by these activities leading to cross-subsidizations

▪ Support process of getting political approval for fee increases

Close the lobby at Leeland

▪ Customers can pay cash at multiple supermarkets across the city and resolve inquiries over the phone

▪ Lobby operation is a security issue (armed guard needed) and costly

▪ Approve lobby closure

Eliminate yellow bill

▪ Customers who do not pay their bill get two reminders – the yellow and the pink bill

▪ Yellow bill almost never leads to a payment and hence can be saved

▪ Approve elimination of yellow bill

1,560

940

309

222

8

Contents






9

2 initiatives in Drinking Water Maintenance will reduce reactive work and improve efficiency

Initiatives

▪ Reduce repetitive failures

▪ Prevent common failures, and minimize the impact of remaining failures, to free up time and reduce costs

▪ Improve maintenance efficiency

▪ Make efficient use of technicians’ time through better planning and scheduling to enable above changes

1

2

Objective Ongoing impact*, $000s

Current target is to absorb production capacity expansion with current maintenance capacity rather than reduce budgets


246

492

738

10

Solutions identified Impact

▪ Annual savings of $71K identified

▪ Based on reduction in blockages seen at SE/NEPP

Example: Lime System maintenance costs can be reduced by preventing repetitive failures

SOURCE: EWPP maintenance workshop #1, 10/28/2009

Issue

▪ Grit is present in the lime received from the supplier

▪ Grit coats the lime tanks and can cause blockages in lime system piping and components resulting in ~300 reactive service trips each year

Perform auto flush of lime

system once per shift

Perform annual PM to de-grit the

lime tanks (currently done at NE/SEPPs)

PreventionMitigation

Investigate potential to

revise quality specifications on

contract

1

11

Example: A scheduling board is in use at EWPPto help individuals plan ahead and be prepared

Visual scheduling board

Priority list

Detail shot

2

12

Contents






13

5 initiatives in Waste Water Maintenance will reduce reactive work and improve efficiency

Initiatives

▪ Optimize dissolved oxygen control

▪ Use only as many blowers as needed to reduce electricity costs

▪ Reduce repetitive failures

▪ Prevent common failures, and minimize the impact of remaining failures, to free up time and reduce costs

▪ Insource pump maintenance

▪ Complete a portion of pump maintenance in-house to reduce costs

▪ Improve maintenance efficiency

▪ Make efficient use of technicians’ time through better planning and scheduling to enable above changes

▪ Optimize centrifuge operation

▪ Operate two centrifuges per dryer to reduce natural gas consumption

1

2

3

4

5

ObjectiveOngoing impact*, $000s

* Annualized savings, FY11 potential depends on implementation date**`Savings reinvested into enabling other initiatives

1,030

1,030

300

500

0**

2,860

14

Impact

▪ Annual savings of $252K identified

▪ Assumes the solutions identified will be 50% effective at preventing catastrophic damage

▪ Requires $20K upfront investment for alarm, vibration monitors, and thermal gun

▪ Additional investment will be required for cameras

Example: Preventing common Lift Pump failures at 69th Street could save $252k each year

1 Savings are in the process of being validated

SOURCE: 69th Street Initial Maintenance Strategy Workshop, 10/20/2009

Solutions identifiedIssue

▪ Low lift pumps pump sewage from sewer wet well into works

▪ Pump vibration occurs due to large debris and leads to packing deterioration

▪ If packing leakage is not caught and fixed, catastrophic damage to the bearings, shaft and motor can occur

▪ Pump room flooding occurs once per year due to catastrophic pump failure in which all 8 pumps are affected

Install cameras or an operator to

monitor for leakage

Install vibration

monitor on pump

Install sump high level

alarm

Conduct basic PPM including:

greasing, lubing, and thermal

bearing checks

PreventionMitigation

1

15

Example: Operating 2 centrifuges per dryer will result in ~$550K in annual natural gas savings at 69th St

1: 6 random days selected for analysis, impact measured on dryers run during a full daySOURCE: October 2009 69th Street dryer data

4

▪ Sludge dryers at 69th street are more efficient if operated at higher throughput

▪ However, due to technical issues dryers are operated with only one centrifuge instead of two ~60% of the time (throughput of 150 gpm instead of 200 GPM)

▪ Consistently operating dryers with two centrifuges would reduce natural gas consumption by ~27% and also allow to operate less dryers

18.8

13.8

2 centrifuges1 centrifuge

-27%

Gas consumption per ton of dried sludge1

Kcf/ton

Savings opportunity

▪ Consistently operating with 2 centrifuges per dryer would save ~ 550k US$ on natural gas costs

▪ In addition, running fewer dryers at higher throughput has the potential to reduce maintenance costs

Implementation steps

▪ In the short term, implementation might require re-allocating centrifuges between dryers to ensure availabiltiy of 2 centrifuges per operating dryer

▪ In the long term, diverter valves should be changed/repaired to allow for centrifuge maintenance while dryers are operational

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Contents






17

6 initiatives in the UMB will improve work processes and reduce non-value-adding activities

Initiatives

▪ 2 men teams for applicable tasks

▪ Align crew size with job requirements instead of having 3-men teams for all jobs

▪ Better investigations

▪ Reduce repeat visits to job sites by improving investigation quality and communication

▪ Performance management

▪ Make field performance transparent and engage employees in performance dialogs to identify and resolve issues

▪ Quality assurance ▪ Reduce the number of in person QA visits– Improve photo quality– Make QA everyone’s responsibility

▪ Better planning ▪ Improve compliance with standard procedures– Well stocked trucks– Use less fill material– Reduce waiting for dump trucks

▪ Better scheduling and prioritization

▪ Assign jobs to crews based on investigation results to ensure each crew has a fully loaded schedule with minimal waiting times

1

2

3

4

5

6



1,035

925

525

502

2,987

18

Example: Written investigation reports help ensure teams have the information they need

Reports being completed by all field investigators

Reports scored for completeness and accuracy

Investigation scores tracked over time to facilitate performance management and training

Teams sent to the field with a ‘job packet’

Contains:▪ Investigation report

– Detailed information on the job

▪ GEM map– Detail on the

surrounding area– Location of valves

▪ Work order – Maintains current

documentation for IMS

GEM map

▪ Investigation report now being used across the quadrant– Used for scheduling and

planning▫ Size of crew needed▫ Time on site needed▫ Priority

– Given to supervisors to eliminate duplicate visits

– Given to crews to reduce time on job site (e.g., find valves faster)

1

19

The performance management system shows the 50% productivity improvement achieved in the UMP pilot3

UMB pilot impact

0.45

0.65

0.8

0.5

0.8

1.0

1.31.2

0.8

1.3

1.1

1.3

0.9

1.2

1.0

0.7

1.0 1.0

0

0.2

0.4

0.6

0.8

1

1.2

1.4

FY09

FY10

27-O

ct

28-O

ct

29-O

ct

30-O

ct

3-N

ov

4-N

ov

5-N

ov

6-N

ov

10-N

ov

12-N

ov

13-N

ov

17-N

ov

18-N

ov

20-N

ov

24-N

ov

25-N

ov

26-N

ov

27-N

ov

28-N

ov

29-N

ov

BaselinePilot resultsPilot Average

Baseline

Pilot Average

Increase / (Decrease)

0.65

0.98

50%

Not enough work available to maintain

productivity

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Contents






21

5 initiatives in UCS will improve work processes and reduce waste

Initiatives

▪ Increase service fees to match costs of services provided

▪ Increase revenue using a fair method of charging for services

▪ Reduce field operations workload

▪ Eliminate need for contractors and bring work down to a more manageable level through first time fixes

▪ Increase use of low cost billing and payment channels

▪ Save on costs of materials by converting customers to e-bill and electronic payments; improve the environment

▪ Eliminate the yellow bill ▪ Save costs of sending out yellow bill as yellow bill has shown to have minimal impact

▪ Close the lobby at Leeland

▪ Reduce costs and inefficiency of having multiple cash payment locations in the same area by closing lobby at Leeland

1

2

3

4

5



1,560

940

305

309

222

3,336

22

Example: During the pilot, in-house staff fixes increased 156%, reducing repetitive field work

* Fixes defined as when account endpoints or meter are updated, newly installed, or changed out ** Before based on sample data from October*** Uses average of 12 full time field staff ****Contractors completed 157 fixes/day prior to pilot and 173 fixes/day during pilot

In house field staff fixes*/person***

17

7

AfterBefore**

+156%

▪ Field staff emphasized fixes over getting reads and given tools and time to address problems

▪ Field managers expressed enthusiasm over the increase in accounts fixed citing the reduction in future workload

▪ Room for increase in-house staff fixes/day as contractors average roughly 23-24 fixes/day****

Key findings

1

23

Example: Decisions are required on increasing fees to cover direct costs and limit cross-subsidisation2


▪ Comprehensive field observations and time in motion studies were conducted to establish the true costs of key services provided

– Cost of opening a new account are ~$20 compared to current $5 fee

– Restoration of service (includes termination, restoration and all attempts to collect bill) costs ~$45 compared to current fee of $30

– Commercial customers and apartment complexes still receive paper bills free of charge despite cost of ~$4.80 per annum

▪ Further fees still under review, e.g., for returned checks and illegal reconnection

▪ Connect fee to be increased from $5 to $20 with a $5 discount for customers who sign up to e-bill

▪ Restoration of service fee to be increased to $45

▪ Commercial customers and appartmentcomplexes to pay $5 annual paper bill fee if they do not switch to e-bill (in line with what other utilities charge)

▪ ~$440,000

▪ ~$213,000

▪ ~$200,000

Measure Impact estimate*

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